Ireland’s telecoms market is “vibrant, crowded and competitive,” according to a new report that finds the sector generated about €3.7 billion in revenues last year.

The latest Irish Telecoms Dashboard from ratings agency Fitch forecasts that investment in the sector will remain high in the coming years, primarily due to spending by Eir on its fibre network.

The report also says that consumers have not benefited from lower prices in the almost two years since Three acquired O2. It adds that with increased operator consolidation, competitive emphasis is increasing focused on network quality, rather than on costs.

“Domestic average revenue per user (ARPU) trends remain under pressure and Ireland has some of the lowest ARPUs among advanced western European mobile markets,” Fitch said.

The agency said retail fixed-line competition is "remarkably similar" to the UK with the incumbent Eir facing stiff competition from bundled services provided by rivals such as Virgin Media and Sky. It said customer losses to Eir from fixed line operators were less dilutive than losses to Virgin, its only last mile retail access competitor.

“Eir’s retail broadband position has been eroded but its revenue share of the Irish fixed market appears to be stabilising at around 49 per cent with the success of Sky and Vodafone’s broadband offers generating sizeable and growing wholesale revenues for the incumbent,” Fitch said.

It added that with improving APRU trends at both the retail and wholesale levels, along with sizeable cost-cutting, Eir has managed to stabilise its fixed earnings before interest, tax, depreciation and amortisation (ebitda).

Publication of the report comes a week after Fitch revised Eir’s outlook grade to positive from stable and affirmed its long-term issuer default rating at ‘B’.